Walmart reports Q3 EPS of $1.08, reaffirms top end of full-year EPS
guidance; Company is well positioned for Q4 holidays

Q3 Highlights:

Wal-Mart Stores, Inc. (Walmart) reported third quarter diluted
earnings per share from continuing operations of $1.08, within
guidance of $1.04 to $1.09. This was an 11.3 percent increase from the
$0.97 per share reported for the third quarter last year.

The company updated its full year earnings guidance, narrowing the
range by five cents to $4.88 to $4.93. The top of the range remains
unchanged from the guidance provided last quarter, when the company
tightened the range and increased it by a penny.

Net sales were $113.2 billion, a 3.4 percent increase over last
year. Currency exchange rate fluctuations negatively impacted net
sales by approximately $1.7 billion. Without the currency impact1,
net sales would have been $114.9 billion, a 4.9 percent increase.

Year to date, the company returned $8.7 billion to shareholders
through dividends and share repurchases.

November 15, 2012 07:06 AM Eastern Daylight Time

BENTONVILLE, Ark.--(BUSINESS WIRE)--Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for
the quarter ended Oct. 31, 2012. Net sales for the third quarter of
fiscal 2013 were $113.2 billion, an increase of 3.4 percent from $109.5
billion in the third quarter last year. Net sales for this quarter
included a negative currency exchange rate impact of approximately $1.7
billion. Without the currency impact, net sales would have been $114.9
billion. Membership and other income increased 2.1 percent to $725
million. Total revenue was $113.9 billion, an increase of 3.4 percent
from last year.

“Inflation was lower than last quarter and much less
than a year ago. While lower costs are good for our members, deflation
impacted comp sales more than expected. Sam’s Club is stepping up price
investment for the holidays, and we are well prepared for our members’
gifting and entertaining needs.”

Income from continuing operations attributable to Walmart for the
quarter was $3.6 billion, up 8.7 percent from the third quarter last
year. Diluted earnings per share from continuing operations attributable
to Walmart (EPS) for the third quarter of fiscal 2013 were $1.08. By
comparison, last year’s reported EPS were $0.97.

The current quarter benefited from a 31.3 percent effective tax rate.
This benefit was mostly offset by approximately $105 million in pre-tax
charges which are included in operating expenses:

an approximate $69 million for changes in estimated contingent
liabilities related to employment claims in Brazil; and

an approximate $36 million for damages from Superstorm Sandy, mainly
in the Walmart U.S. business.

Solid earnings performance

“We’re very pleased with our financial performance for the third quarter
and the dedication and hard work of our associates serving Walmart
customers and communities around the world,” said Mike Duke, Wal-Mart
Stores, Inc. president and chief executive officer. “Earnings per share
were $1.08, which represents an 11.3 percent increase over the third
quarter last year.”

The company leveraged operating expenses for the third quarter,
delivering on its commitment to reduce costs, improve productivity and
invest in price.

“Our disciplined approach to operating the business and to the
productivity loop drove profitability and expense leverage,” said Duke.
“Our fundamentals are strong, and we are well-positioned for the fourth
quarter, including innovative plans to drive traffic, especially in our
U.S. stores.

“Price will continue to be a major factor for U.S. customers over the
holidays. Our strong price position and broad assortment are clear
competitive advantages,” he explained. “Across all of our markets, we
are seeing the same price consciousness as we do in the United States.
More customers are part of a growing global middle class, looking for
quality, value and a better life, and our EDLP model matters to these
customers.”

Duke also noted that the company continues to invest in e-commerce to
build the anywhere, anytime relationship that customers want.

“We made significant progress this quarter in enhancing our walmart.com
site for U.S. customers, and we are expanding e-commerce opportunities
for shoppers in our key markets, including China, the U.K. and Brazil,”
said Duke. “We also increased our position in China e-commerce retailer
Yihaodian to 51 percent.”

“Despite current economic conditions, we continue to produce solid
operating results with strong cash flow from operations,” said Charles
Holley, executive vice president and chief financial officer. “The
strength of our free cash flow allows us to provide good returns to our
shareholders through dividends and share repurchases.”

Company updates full-year EPS guidance

“Current macroeconomic conditions continue to pressure our customers,”
said Holley. “The holiday season is predicted to be very competitive,
but we are well prepared to deliver on the value and low prices our
customers expect.

“We consider the competitive retail environment and economic factors,
among others, when we provide guidance. Based on these considerations,
we expect fourth quarter fiscal 2013 diluted earnings per share from
continuing operations to range between $1.53 and $1.58. This compares to
last year’s fourth quarter reported EPS of $1.51, which benefitted $0.07
from certain items,” said Holley. “Net of those items, earnings per
share for last year’s fourth quarter would have been $1.44.

“For the full year, we are tightening and reaffirming the top end of our
earnings per share guidance to a range of $4.88 to $4.93. This compares
to our previous guidance of $4.83 to $4.93,” Holley said. “Last year’s
full-year EPS was $4.54.”

Operating segment details and analysis

Net sales

Net sales, including fuel, were as follows (dollars in billions):

Three Months Ended

Nine Months Ended

October 31,

October 31,

Percent

Percent

2012

2011

Change

2012

2011

Change

Net Sales:

Walmart U.S.

$

66.127

$

63.835

3.6

%

$

199.825

$

191.397

4.4

%

Walmart International

33.159

32.383

2.4

%

97.252

90.387

7.6

%

Sam's Club

13.918

13.298

4.7

%

41.933

39.785

5.4

%

Total Company

$

113.204

$

109.516

3.4

%

$

339.010

$

321.569

5.4

%

The following explanations provide additional context to the above table
for the third quarter.

Constant currency consolidated net sales would have increased by 4.9
percent to $114.9 billion during the third quarter.

Walmart International net sales, on a constant currency basis, would
have increased 7.6 percent to $34.8 billion.

Sam’s Club net sales, excluding fuel, were $12.2 billion, an increase
of 3.6 percent from last year’s third quarter results.

Segment operating income

Segment operating income was as follows (dollars in billions):

Three Months Ended

Nine Months Ended

October 31,

October 31,

2012

2011

Percent

Change

2012

2011

Percent

Change

Segment Operating Income:

Walmart U.S.

$

4.844

$

4.634

4.5

%

$

15.128

$

14.280

5.9

%

Walmart International

1.455

1.389

4.8

%

4.258

3.885

9.6

%

Sam's Club

0.435

0.386

12.7

%

1.461

1.328

10.0

%

The following explanations provide additional context to the above table
for the third quarter.

Consolidated operating income, which includes other unallocated, was
$6.1 billion, up 4.0 percent from last year. On a constant currency
basis, consolidated operating income would have increased 4.5 percent.

All three segments grew operating income faster than sales, a company
priority.

On a constant currency basis, Walmart International’s operating income
would have increased 6.8 percent. Currency exchange rate fluctuations
negatively impacted operating income by approximately $29 million.

Sam’s Club operating income, excluding fuel, increased 14.2 percent.

“We were pleased that our constant currency sales and operating income
were both up approximately 7 percent for the third quarter,” said Doug
McMillon, president and CEO of Walmart International. “We gained market
share in almost all of our markets, indicating that our underlying
business is performing well. We are working hard to improve execution
where it’s needed, and we’re ready with great merchandise and price
investments for the fourth quarter.”

U.S. comparable store sales review and guidance

The company reported U.S. comparable store sales based on its 13-week
and 39-week retail calendar periods ended Oct. 26, 2012 and Oct. 28,
2011, as follows:

Without Fuel

With Fuel

Fuel Impact

Thirteen Weeks Ended

Thirteen Weeks Ended

Thirteen Weeks Ended

10/26/12

10/28/11

10/26/12

10/28/11

10/26/12

10/28/11

Walmart U.S.

1.5

%

1.3

%

1.5

%

1.3

%

0.0

%

0.0

%

Sam's Club

2.7

%

5.7

%

3.8

%

9.0

%

1.1

%

3.3

%

Total U.S.

1.7

%

1.9

%

1.9

%

2.6

%

0.2

%

0.7

%

Without Fuel

With Fuel

Fuel Impact

Thirty-Nine Weeks Ended

Thirty-Nine Weeks Ended

Thirty-Nine Weeks Ended

10/26/12

10/28/11

10/26/12

10/28/11

10/26/12

10/28/11

Walmart U.S.

2.1

%

-0.3

%

2.1

%

-0.3

%

0.0

%

0.0

%

Sam's Club

4.1

%

5.0

%

4.4

%

9.0

%

0.3

%

4.0

%

Total U.S.

2.4

%

0.5

%

2.5

%

1.3

%

0.1

%

0.8

%

During the 13-week period, the Walmart U.S. comp was driven by an
increase in average ticket of 1.4 percent. Traffic was positive by 0.1
percent. All three geographic regions had positive comp sales.

“We again delivered strong sales across the business, adding $2.3
billion in revenue. Comp sales increased 1.5 percent this quarter, as we
lapped a 1.3 percent comp last year,” said Bill Simon, Walmart U.S.
president and chief executive officer. “We’re excited about the fourth
quarter. November sales started ahead of plan. Our Black Friday plans
are innovative and designed to drive additional traffic in our stores.
We expect strong performance through Thanksgiving weekend.”

For the 4-5-4 period from Oct. 27, 2012 through Jan. 25, 2013, Walmart
U.S. expects comp store sales to range from 1.0 percent to 3.0 percent.
The Walmart U.S. 13-week comp for last year’s fourth quarter rose 1.5
percent.

For Sam’s Club, comp traffic and ticket, excluding fuel, increased for
both Business and Advantage members for the 13-week period ended Oct. 26.

“Sam’s Club comp sales, while a solid 2.7 percent, fell short of our
guidance. Business members in particular, continued to be pressured
economically,” said Rosalind Brewer, Sam’s Club president and chief
executive officer. “Inflation was lower than last quarter and much less
than a year ago. While lower costs are good for our members, deflation
impacted comp sales more than expected. Sam’s Club is stepping up price
investment for the holidays, and we are well prepared for our members’
gifting and entertaining needs.”

Sam’s Club expects comp sales, without fuel, for the current 13-week
period ending Jan. 25, 2013, to increase between 1.5 percent and 3.5
percent. Last year, Sam’s Club comp, without fuel, for the fourth
quarter comparable 13-week period rose 5.4 percent.

To align with the company’s internal operating systems, Walmart will
report comp sales for the fourth quarter of fiscal year 2013 on a 4-5-4
basis and will not recognize a 53-week retail calendar this year. For
fiscal year 2014, Walmart will report comp store sales on a 53-week
basis, with 4-5-5 reporting for the fourth quarter.

Both Walmart U.S. and Sam’s Club will report comp sales for the 13-week
period on Feb. 21, 2013, when the company reports fourth quarter results.

Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save
money and live better – anytime and anywhere – in retail stores, online,
and through their mobile devices. Each week, more than 200 million
customers and members visit our 10,500 stores under 69 banners in 27
countries and e-commerce websites in 10 countries. With fiscal year 2012
sales of approximately $444 billion, Walmart employs more than 2 million
associates worldwide. Walmart continues to be a leader in
sustainability, corporate philanthropy and employment opportunity.
Additional information about Walmart can be found by visiting http://corporate.walmart.com,
and on Facebook at http://facebook.com/walmart
and on Twitter at http://twitter.com/walmart.
Online merchandise sales are available at http://www.walmart.com
and http://www.samsclub.com.

Notes

After this earnings release has been furnished to the Securities and
Exchange Commission (SEC), a pre-recorded call offering additional
comments on the quarter will be available to all investors. Please
note: Walmart has a new phone number for accessing the pre-recorded call.
Callers within the U.S and Canada may dial 877-523-5612 and enter
passcode 9256278. All other callers can access the call by dialing
201-689-8483 and entering passcode 9256278. Information included in this
release, including reconciliations, and the pre-recorded phone call are
available in the investor information area on the company’s website at www.stock.walmart.com.

Editor’s Note: High resolution
photos of Walmart’s U.S. business, Sam’s Club and international
operations are available for download at: www.stock.walmart.com.

1 See additional information at the end of this
release regarding non-GAAP measures.

Forward-looking statements

This release contains statements as to Walmart management’s forecasts of
the company’s earnings per share for the fiscal quarter and fiscal year
to end Jan. 31, 2013 (and certain assumptions underlying such
forecasts), and management's expectations regarding the comparable store
sales of the Walmart U.S. segment and comparable club sales, excluding
fuel, of the Sam’s Club segment of the company for the 13-week period
from Oct. 27, 2012 through Jan. 25, 2013, and management’s expectations
that the Walmart U.S. operating segment will have strong performance
through Thanksgiving weekend that the company believes are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. These statements
are intended to enjoy the protection of the safe harbor for
forward-looking statements provided by that act. Those statements can be
identified by the use of the word or phrase “based on,” “consider,”
“expect,” “expects,” “guidance,” “we’ll offer” and “will implement” in
the statements or relating to such statements. These forward-looking
statements are subject to risks, uncertainties and other factors,
domestically and internationally, including: general economic
conditions; economic conditions affecting specific markets in which we
operate; competitive pressures; inflation and deflation; consumer
confidence, disposable income, credit availability, spending patterns
and debt levels; the seasonality of Walmart’s business and seasonal
buying patterns in the United States and other markets; geo-political
conditions and events; weather conditions and events and their effects;
catastrophic events and natural disasters and their effects on Walmart’s
business; public health emergencies; civil unrest and disturbances and
terrorist attacks; commodity prices; the cost of goods Walmart sells;
transportation costs; the cost of diesel fuel, gasoline, natural gas and
electricity; the selling prices of gasoline; disruption of Walmart’s
supply chain, including transport of goods from foreign suppliers; trade
restrictions; changes in tariff and freight rates; labor costs; changes
in employment laws and regulations; the cost of healthcare and other
benefits; casualty and other insurance costs; accident-related costs;
adoption of or changes in tax and other laws and regulations that affect
Walmart’s business, including changes in corporate tax rates;
developments in, and the outcome of, legal and regulatory proceedings to
which Walmart is a party or is subject; currency exchange rate
fluctuations; changes in market interest rates; conditions and events
affecting domestic and global financial and capital markets; and other
risks. The company discusses certain of these factors more fully in
certain of its filings with the SEC, including its most recent annual
report on Form 10-K filed with the SEC, and this release should be read
in conjunction with that annual report on Form 10-K, together with all
of the company’s other filings, including its current reports on Form
8-K, made with the SEC through the date of this release. The company
urges readers to consider all of these risks, uncertainties and other
factors carefully in evaluating the forward-looking statements contained
in this release. As a result of these matters, changes in facts,
assumptions not being realized or other circumstances, the company’s
actual results may differ materially from the expected results discussed
in the forward-looking statements contained in this release. We discuss
our existing FCPA investigation and related matters in the filed portion
of our Nov. 15, 2012 Form 8-K, as well as in our Form 10-Q filed on
Sept. 6, 2012 and investors are referred to those SEC reports for
information concerning those matters. The forward-looking statements
made in this release are made only as of the date of this release, and
Walmart undertakes no obligation to update them to reflect subsequent
events or circumstances.

Wal-Mart Stores, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

SUBJECT TO RECLASSIFICATION

Three Months Ended

Nine Months Ended

October 31,

October 31,

(Amounts in millions except per share data)

2012

2011

Percent

Change

2012

2011

Percent

Change

Revenues:

Net sales

$

113,204

$

109,516

3.4

%

$

339,010

$

321,569

5.4

%

Membership and other income

725

710

2.1

%

2,233

2,212

0.9

%

Total Revenue

113,929

110,226

3.4

%

341,243

323,781

5.4

%

Cost of sales

85,517

82,591

3.5

%

256,360

242,538

5.7

%

Operating, selling, general and administrative expenses

22,296

21,757

2.5

%

65,682

63,086

4.1

%

Operating income

6,116

5,878

4.0

%

19,201

18,157

5.7

%

Interest:

Debt

522

528

-1.1

%

1,512

1,544

-2.1

%

Capital leases

68

72

-5.6

%

206

218

-5.5

%

Interest income

(43

)

(65

)

-33.8

%

(131

)

(131

)

0.0

%

Interest, net

547

535

2.2

%

1,587

1,631

-2.7

%

Income from continuing operations before income taxes

5,569

5,343

4.2

%

17,614

16,526

6.6

%

Provision for income taxes

1,744

1,842

-5.3

%

5,734

5,510

4.1

%

Income from continuing operations

3,825

3,501

9.3

%

11,880

11,016

7.8

%

Loss from discontinued operations, net of tax

-

(8

)

-100.0

%

-

(36

)

-100.0

%

Consolidated net income

3,825

3,493

9.5

%

11,880

10,980

8.2

%

Less consolidated net income attributable to noncontrolling
interest

(190

)

(157

)

21.0

%

(487

)

(444

)

9.7

%

Consolidated net income attributable to Walmart

$

3,635

$

3,336

9.0

%

$

11,393

$

10,536

8.1

%

Income from continuing operations attributable to Walmart:

Income from continuing operations

$

3,825

$

3,501

9.3

%

$

11,880

$

11,016

7.8

%

Less consolidated net income attributable to noncontrolling interest

(190

)

(157

)

21.0

%

(487

)

(444

)

9.7

%

Income from continuing operations attributable to Walmart

$

3,635

$

3,344

8.7

%

$

11,393

$

10,572

7.8

%

Basic net income per common share:

Basic income per common share from continuing operations
attributable to Walmart

$

1.08

$

0.97

11.3

%

$

3.37

$

3.04

10.9

%

Basic income per common share from discontinued operations
attributable to Walmart

-

-

-

-

(0.01

)

-100.0

%

Basic net income per common share attributable to Walmart

$

1.08

$

0.97

11.3

%

$

3.37

$

3.03

11.2

%

Diluted net income per common share:

Diluted income per common share from continuing operations
attributable to Walmart

$

1.08

$

0.97

11.3

%

$

3.35

$

3.03

10.6

%

Diluted income per common share from discontinued operations
attributable to Walmart

-

(0.01

)

-100.0

%

-

(0.01

)

-100.0

%

Diluted net income per common share attributable to Walmart

$

1.08

$

0.96

12.5

%

$

3.35

$

3.02

10.9

%

Weighted-average number of common shares:

Basic

3,364

3,445

3,385

3,473

Diluted

3,379

3,458

3,400

3,487

Dividends declared per common share

$

-

$

-

$

1.59

$

1.46

Wal-Mart Stores, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

SUBJECT TO RECLASSIFICATION

October 31,

January 31,

October 31,

(Amounts in millions)

2012

2012

2011

ASSETS

Current assets:

Cash and cash equivalents

$

8,643

$

6,550

$

7,063

Receivables, net

5,567

5,937

4,757

Inventories

47,487

40,714

44,340

Prepaid expenses and other

1,654

1,685

3,227

Current assets of discontinued operations

80

89

89

Total current assets

63,431

54,975

59,476

Property and equipment:

Property and equipment

163,011

155,002

151,638

Less accumulated depreciation

(50,450

)

(45,399

)

(43,909

)

Property and equipment, net

112,561

109,603

107,729

Property under capital leases:

Property under capital leases

5,900

5,936

5,860

Less accumulated amortization

(3,208

)

(3,215

)

(3,197

)

Property under capital leases, net

2,692

2,721

2,663

Goodwill

20,572

20,651

20,409

Other assets and deferred charges

6,562

5,456

4,967

Total assets

$

205,818

$

193,406

$

195,244

LIABILITIES AND EQUITY

Current liabilities:

Short-term borrowings

$

8,740

$

4,047

$

9,594

Accounts payable

40,272

36,608

37,555

Dividends payable

1,381

-

1,305

Accrued liabilities

18,536

18,154

16,890

Accrued income taxes

1,010

1,164

382

Long-term debt due within one year

6,550

1,975

1,470

Obligations under capital leases due within one year

331

326

321

Current liabilities of discontinued operations

25

26

27

Total current liabilities

76,845

62,300

67,544

Long-term debt

38,872

44,070

44,872

Long-term obligations under capital leases

2,964

3,009

2,979

Deferred income taxes and other

8,044

7,862

8,085

Redeemable noncontrolling interest

492

404

373

Commitments and contingencies

Equity:

Common stock

336

342

344

Capital in excess of par value

3,861

3,692

3,425

Retained earnings

70,256

68,691

64,769

Accumulated other comprehensive income (loss)

(562

)

(1,410

)

(1,375

)

Total Walmart shareholders’ equity

73,891

71,315

67,163

Noncontrolling interest

4,710

4,446

4,228

Total equity

78,601

75,761

71,391

Total liabilities and equity

$

205,818

$

193,406

$

195,244

Wal-Mart Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

SUBJECT TO RECLASSIFICATION

Nine Months Ended

October 31,

(Amounts in millions)

2012

2011

Cash flows from operating activities:

Consolidated net income

$

11,880

$

10,980

Loss from discontinued operations, net of tax

-

36

Income from continuing operations

11,880

11,016

Adjustments to reconcile income from continuing operations to net
cash provided by operating activities:

Depreciation and amortization

6,322

6,067

Deferred income taxes

279

1,342

Other

81

25

Changes in certain assets and liabilities, net of effects of
acquisitions:

Accounts receivable

501

499

Inventories

(6,459

)

(7,357

)

Accounts payable

3,545

3,417

Accrued liabilities

(82

)

(2,305

)

Accrued taxes

(160

)

210

Net cash provided by operating activities

15,907

12,914

Cash flows from investing activities:

Payments for property and equipment

(8,921

)

(9,543

)

Proceeds from disposal of property and equipment

343

354

Investments and business acquisitions, net of cash acquired

(716

)

(3,537

)

Other investing activities

(58

)

(88

)

Net cash used in investing activities

(9,352

)

(12,814

)

Cash flows from financing activities:

Net change in short-term borrowings

4,700

8,558

Proceeds from issuance of long-term debt

199

5,008

Payment of long-term debt

(639

)

(4,265

)

Dividends paid

(4,034

)

(3,800

)

Purchase of Company stock

(4,657

)

(4,957

)

Other financing activities

(263

)

(828

)

Net cash used in financing activities

(4,694

)

(284

)

Effect of exchange rates on cash and cash equivalents

232

(148

)

Net increase (decrease) in cash and cash equivalents

2,093

(332

)

Cash and cash equivalents at beginning of year

6,550

7,395

Cash and cash equivalents at end of period

$

8,643

$

7,063

Reconciliations of and Other Information Regarding Non-GAAP Financial
Measures

(Unaudited)

(In millions, except per share data)

The following information provides reconciliations of certain non-GAAP
financial measures presented in the press release to which this
reconciliation is attached to the most nearly comparable financial
measures calculated and presented in accordance with generally accepted
accounting principles (“GAAP”). The company has provided the non-GAAP
financial information presented in the press release, which is not
calculated or presented in accordance with GAAP, as information
supplemental and in addition to the financial measures presented in the
press release that are calculated and presented in accordance with GAAP.
Such non-GAAP financial measures should not be considered superior to,
as a substitute for or as an alternative to, and should be considered in
conjunction with, the GAAP financial measures presented in the press
release. The non-GAAP financial measures in the press release may differ
from similar measures used by other companies.

Free Cash Flow

We define free cash flow as net cash provided by operating activities in
a period minus payments for property and equipment made in that period.
Free cash flow was $7.0 billion and $3.4 billion for the nine-months
ended Oct. 31, 2012 and 2011, respectively.

Free cash flow is considered a non-GAAP financial measure. Management
believes, however, that free cash flow, which measures our ability to
generate additional cash from our business operations, is an important
financial measure for use in evaluating the company’s financial
performance. Free cash flow should be considered in addition to, rather
than as a substitute for, income from continuing operations as a measure
of our performance and net cash provided by operating activities as a
measure of our liquidity.

Additionally, our definition of free cash flow is limited, in that it
does not represent residual cash flows available for discretionary
expenditures as the measure does not deduct the payments required for
debt service and other contractual obligations or payments made for
business acquisitions. Therefore, we believe it is important to view
free cash flow as a measure that provides supplemental information to
our entire statements of cash flows.

Although other companies report their free cash flow, numerous methods
may exist for calculating a company’s free cash flow. As a result, the
method used by our management to calculate free cash flow may differ
from the methods other companies use to calculate their free cash flow.
We urge you to understand the methods used by other companies to
calculate their free cash flow before comparing our free cash flow to
that of such other companies.

The following table sets forth a reconciliation of free cash flow, a
non-GAAP financial measure, to net cash provided by operating
activities, which we believe to be the GAAP financial measure most
directly comparable to free cash flow, as well as information regarding
net cash used in investing activities and net cash used in financing
activities.

For the Nine Months Ended

October 31,

(Amounts in millions)

2012

2011

Net cash provided by operating activities

$

15,907

$

12,914

Payments for property and equipment

(8,921

)

(9,543

)

Free cash flow

$

6,986

$

3,371

Net cash used in investing activities(1)

$

(9,352

)

$

(12,814

)

Net cash used in financing activities

$

(4,694

)

$

(284

)

(1)

“Net cash used in investing activities” includes payments for
property and equipment, which is also included in our computation
of free cash flow.

Calculation of Return on Investment and Return on Assets

Management believes return on investment (“ROI”) is a meaningful metric
to share with investors because it helps investors assess how
effectively Walmart is deploying its assets. Trends in ROI can fluctuate
over time, as management balances long-term potential strategic
initiatives with any possible short-term impacts.

We define ROI as adjusted operating income (operating income plus
interest income, depreciation and amortization, and rent expense) for
the fiscal year or trailing 12 months divided by average invested
capital during that period. We consider average invested capital to be
the average of our beginning and ending total assets of continuing
operations, plus average accumulated depreciation and average
amortization, less average accounts payable and average accrued
liabilities for that period, plus a rent factor equal to the rent for
the fiscal year or trailing 12 months multiplied by a factor of eight.

ROI is considered a non-GAAP financial measure. We consider return on
assets (“ROA”) to be the financial measure computed in accordance with
GAAP that is the most directly comparable financial measure to ROI as we
calculate that financial measure. ROI differs from ROA (which is income
from continuing operations for the fiscal year or trailing 12 months
divided by average total assets of continuing operations for the period)
because ROI: adjusts operating income to exclude certain expense items
and adds interest income; adjusts total assets from continuing
operations for the impact of accumulated depreciation and amortization,
accounts payable and accrued liabilities; and incorporates a factor of
rent to arrive at total invested capital.

Although ROI is a standard financial metric, numerous methods exist for
calculating a company’s ROI. As a result, the method used by management
to calculate ROI may differ from the methods other companies use to
calculate their ROI. We urge you to understand the methods used by other
companies to calculate their ROI before comparing our ROI to that of
such other companies.

Wal-Mart Stores, Inc.

Return on Investment Calculation

For the Trailing Twelve Months Ended,

October 31,

(Dollar amounts in millions)

2012

2011

CALCULATION OF RETURN ON INVESTMENT

Numerator

Operating income

$

27,602

$

26,161

+ Interest income

163

171

+ Depreciation and amortization

8,385

8,073

+ Rent

2,575

2,253

= Adjusted operating income

$

38,725

$

36,658

Denominator

Average total assets of continuing operations(1)

$

200,447

$

190,954

+ Average accumulated depreciation and amortization(1)

50,382

46,040

- Average accounts payable(1)

38,914

36,882

- Average accrued liabilities(1)

17,713

17,204

+ Rent * 8

20,600

18,024

= Average invested capital

$

214,802

$

200,932

Return on investment (ROI)

18.0

%

18.2

%

CALCULATION OF RETURN ON ASSETS

Numerator

Income from continuing operations

$

17,318

$

16,195

Denominator

Average total assets of continuing operations(1)

$

200,447

$

190,954

Return on asset (ROA)

8.6

%

8.5

%

As of October 31,

Certain Balance Sheet Data

2012

2011

2010

Total assets of continuing operations(2)

$

205,738

$

195,155

$

186,753

Accumulated depreciation and amortization

53,658

47,106

44,974

Accounts payable

40,272

37,555

36,208

Accrued liabilities

18,536

16,890

17,518

(1) The average is based on the addition of the
account balance at the end of the current period to the account
balance at the end of the prior period and dividing by 2.

(2) Based on continuing operations only and therefore
excludes the impact of discontinued operations. Total assets as
of Oct. 31, 2012, 2011 and 2010 in the table above exclude assets
of discontinued operations that are reflected in the Condensed
Consolidated Balance Sheets of $80 million, $89 million and $137
million, respectively.

Constant Currency

In discussing our operating results, we sometimes refer to the impact of
changes in currency exchange rates that we use to convert the operating
results for all countries where the functional currency is not the U.S.
dollar. We calculate the effect of changes in currency exchange rates as
the difference between current period activity translated using the
current period’s currency exchange rates and the comparable prior year
period’s currency exchange rates. Throughout our discussion, we refer to
the results of this calculation as the impact of currency exchange rate
fluctuations. When we refer to constant currency operating results, we
are referring to our operating results without the impact of the
currency exchange rate fluctuations and without the impact of
acquisitions until the acquisitions are included in both comparable
periods. The disclosure of constant currency amounts or results permits
investors to understand better our underlying performance without the
effects of currency exchange rate fluctuations or acquisitions.

The table below reflects the calculation of constant currency for net
sales and operating income for the three and nine months ended Oct. 31,
2012, respectively.

Three Months Ended October 31, 2012

Nine Months Ended October 31, 2012

International

Consolidated

International

Consolidated

2012

Percent

Change

2012

Percent

Change

2012

Percent

Change

2012

Percent

Change

(Amounts in millions)

Net sales

As reported

$

33,159

2.4

%

$

113,204

3.4

%

$

97,252

7.6

%

$

339,010

5.4

%

Currency exchange rate fluctuations(1)

1,670

1,670

4,662

4,662

34,829

114,874

101,914

343,672

Net sales from acquisitions

-

-

(3,774

)

(3,774

)

Constant currency net sales

$

34,829

7.6

%

$

114,874

4.9

%

$

98,140

8.6

%

$

339,898

5.7

%

Operating income

As reported

$

1,455

4.8

%

$

6,116

4.0

%

$

4,258

9.6

%

$

19,201

5.7

%

Currency exchange rate fluctuations(1)

29

29

189

189

1,484

6,145

4,447

19,390

Operating income from acquisitions

-

-

(53

)

(53

)

Constant currency operating income

$

1,484

6.8

%

$

6,145

4.5

%

$

4,394

13.1

%

$

19,337

6.5

%

(1) Excludes currency exchange rate fluctuations related
to acquisitions until the acquisitions are included in both
comparable periods.